Astrue's Nomination Widely Ignored

Michael Astrue's nomination to be Commissioner of Social Security has been almost completely ignored by traditional news media. Neither the New York Times, nor the Washington Post, nor even the Baltimore Sun has an article on this development. The Associated Press and Reuters have not carried this information. The Social Security Administration has almost 60,000 employees and pays benefits to almost one American in five, but the appointment of a new head for the agency is not worthy of even a brief article, even in Baltimore, where Social Security has its headquarters. Social Security may be the largest employer in Baltimore, but the major Baltimore newspaper did not even notice the appointment of a new head for the agency.

CMS And SSA Heads Bite Dust In One Week -- Coincidence?

The following is an excerpt from The Hill:

Members of the Senate Finance Committee are keeping the pressure on the Medicare and Social Security agencies to fix a glitch that caused hundreds of thousands of beneficiaries to pay the wrong premiums.

The heads of both agencies met with the Finance Committee behind closed doors last week to go over their plans to rectify billing discrepancies that led to many Medicare enrollees owing unpaid premiums to the health-insurance companies providing their drug benefits.

Since meeting with Centers for Medicare and Medicaid Services (CMS) Administrator Mark McClellan and Social Security Administration (SSA) Commissioner JoAnne Barnhart last Thursday, several senators have expressed concern that the plans from agencies might be too harsh, especially for poorer beneficiaries.

These billing errors have brought renewed attention to the pitfalls inherent in rolling out the massive new Part D prescription-drug benefit, which has required the coordination of federal agencies and health insurers.

The administration has disclosed two separate billing problems in recent weeks that together affected an estimated 700,000 Medicare beneficiaries.

First, the administration revealed that 230,000 beneficiaries were accidentally sent refund checks that would have to be returned or repaid.

Later, the administration said that the wrong Medicare premiums had been deducted from Social Security checks sent to 400,000 to 500,000 beneficiaries throughout the year, and that in some cases no premiums at all had been paid for months.

The health plans that administer the drug benefit likewise have not been paid the premiums that CMS and the SSA should have been collecting and passing along. These health plans also will ultimately be responsible for recouping unpaid premiums.

The agency already has contacted the beneficiaries who received accidental refunds and is working individually to establish installment plans for those who may have spent the money already....

Earlier this week, Mark McClelland, the CMS Director, resigned. Now a replacement is named for Jo Anne Barnhart, the Commissioner of Social Security, with almost four months left on her term. All of this happens within a week at a time when frustration with the poor implementation of the Medicare prescription drug benefit is at its peak. Coincidence? While it may be obvious to those familiar with Social Security that the Medicare prescription drug benefit problems lie almost completely with CMS, this may not be at all obvious to Congress and the White House. Perhaps it was already clear that Barnhart was not going to be reappointed and this was merely a question of timing, but there is a strong possibility that Medicare Part D has something to do with what happened this week to McClelland and Barnhart.

More On Astrue

From a Silicon Investor article of February 26, 2003:

Career U-turn brings ex-counsel back to TKT

On Jan. 28, with considerable effort, Michael J. Astrue shaved and put on a tie. It was the first time he had attempted either task in 11 days.

Astrue, the former general counsel at Transkaryotic Therapies Inc. of Cambridge, hadn't been taking his legendary casual-dress philosophy to an extreme. On Jan. 17, he had slipped on the ice while walking from his front door to his car. His left arm was pinned beneath him and he fractured his elbow.

But Astrue had a reason to make himself presentable: There was a reception that afternoon for people who had served on Governor-elect Mitt Romney's transition team.

Moreover, just that morning he had received an invitation to attend a board meeting at TKT's Main Street headquarters. Astrue had resigned from the firm just five weeks earlier. The directors wanted to hear his advice for righting TKT, a 15-year-old biotech firm that had just suffered a series of severe regulatory setbacks that had crushed the near-term prospects for the company's Replagal drug and in four months slashed TKT's share price by 85 percent.

Astrue was planning to spend the new year doing research at the Hudson Institute, a conservative think tank based in Indianapolis, and teaching at the Boston University School of Law, while he sought an appointment somewhere in the Bush administration. But he accepted the invitation to meet the directors for two reasons.

''When provided with an opportunity to offer my opinions in detail, I usually take advantage of it,'' Astrue said. The 46-year-old also had a hunch TKT's board wanted more than to just pick his brain. In fact, Dr. Richard F. Selden, TKT's founder and chief executive, had asked Astrue whether he would consider the chief executive's job in November, just weeks before he left the
company.

''I knew they might be thinking about trying to bring me back,'' said Astrue, who took a taxi and arrived at the company at 2 p.m. Astrue ate a chicken salad sandwich, and talked for about two hours, after which Rodman W. Moorhead III, the chairman, asked him, ''Would you consider coming back as CEO?''

Astrue's return to TKT was announced Feb. 11. For the Milton native, it was another in a series of unexpected career U-turns. In 1985, while serving as a staff attorney at the Department of Health and Human Services, he was asked to interview for a position in the White House counsel's office. ''I was stunned,'' recalled Astrue, who advised presidents Reagan and Bush, ''but when the White House calls and asks you for your resume, you say yes.''

In just a few years, Astrue has become one of the more influential players in Massachusetts' biotechnology industry. After serving as associate counsel to the president, he was general counsel for the Department of Health and Human Services, overseeing an army of hundreds of lawyers. He later was a partner at Mintz Levin Cohn Ferris Glovsky and Popeo PC of Boston, and served as general counsel for Biogen, the Cambridge biotech giant, starting in 1993. He left Biogen for TKT in 2000, and was chairman of the Massachusetts Biotechnology Council in 2001.

For Astrue, the return to TKT is more than just another serendipitous career move. After nearly 20 years spent in supporting roles - overseeing law departments, advising chief executives, handling patent litigation - Astrue is finally the leading man. If he achieves success running TKT, it is likely to be the defining episode of what has already been a high-profile career in the biotechnology industry.

''Mike is an incredibly moral guy,'' said Dr. Burt Adelman, executive vice president of research and development for Biogen Inc., where Astrue served as general counsel. ''I suspect they got him back because he wasn't going to leave something he was committed to when they were having a problem. He doesn't walk away from a fight.'' ...

It is abundantly clear that Astrue has his work cut out for him. Next month, the company will announce a major layoff affecting about 100 employees, or more than 20 percent of its work force. Major changes are also forthcoming in TKT's senior management, according to a former TKT executive.

In a gesture to employees, Astrue said he would forgo his salary for three months. He also said he asked the board to pay him less than Selden earned last year, but declined to specify what his compensation will be. In 2001, the most recent reported year, Selden earned a salary of $400,000 and a bonus of $150,000, according to company documents. ...

Astrue left TKT convinced his future lay in Washington, with an appointment to some sort of government post. That ambition had been thwarted in 2001. President Bush was poised to nominate Astrue to head the FDA, and Astrue had been interviewed by White House officials. But Massachusetts Senator Edward M. Kennedy and other Senate Democrats blocked the nomination, saying it would be a conflict of interest for the drug industry's top watchdog to come from the industry the agency regulates. ...

''Mike is way too smart to be pigeonholed as a lawyer,'' said one TKT executive who worked closely with Astrue. ''He's a strategic thinker and a leader, as well as a lawyer. He wants to prove that he can do it all.''...

Nominee For Commissioner Of Social Security

From the White House Press Office:

The President intends to nominate Michael J. Astrue, of Massachusetts, to be Commissioner of Social Security, for a six year term beginning January 20, 2007. Mr. Astrue previously served as Chief Executive Officer of Transkaryotic Therapies. Earlier in his career, he served as General Counsel at the U.S. Department of Health and Human Services. Previously, he served as Counselor to the Commissioner of Social Security at the U.S. Department of Health and Human Services. He also served as Acting Deputy Assistant Secretary for Legislation at the Department of Health and Human Services. Mr. Astrue received his bachelor's degree from Yale University and his JD from Harvard University.

DSI In Serious Trouble?

Social Security's Disability Service Improvement (DSI) plan may be in serious trouble. The statement below is an anonymous report from the ALJ Improvement Board, supposedly quoting from some communication received from the National Treasury Employees Union.

DSI is underway. Last month training began in Falls Church for the new FedROs. Management has not released much information about the new FedROs but it appears that the Agency was only able to find about 30 (it wanted 70) individuals willing to accept their offer of appointment to the FedRO position in Falls Church. In response to our request for information, the Agency reported that 11 ODAR hearing office GS-12 attorneys accepted the FedRO appointment, but not one single GS-13. I do not know whether that is because no GS-13 accepted an offer or if no offers were made. About 20 agency attorneys have opted to become FedROs and five management personnel have accepted the GS-15 supervisor position. Additionally, about 10 attorneys were hired from the outside.

If true, DSI is in very, very serious trouble and may fail before it even has a chance to get off the ground. The Federal Reviewing (FedRO) job is the centerpiece of DSI. If Social Security is unable to hire enough FedROs the plan cannot possibly be implemented even in Social Security's small Boston Region.

Why might Social Security have trouble hiring Federal Reviewing Officers? The answer is fairly simple -- fear that the program will not last after Jo Anne Barnhart's term as Social Security Commissioner ends in January 2007. If DSI ends after Barnhart leaves SSA, the career of anyone hired as a FedRO may be in jeopardy. Many federal employees are attracted to government employment by the promise of extremely stable employment. Federal employees are on average vastly more frightened of any danger of becoming unemployed than their counterparts in private employment. Few Social Security employees are going to be willing to move to the Washington-Baltimore area to take a job if there is any threat that the job will not last.

Can any Social Security employee in a position to know confirm this report on the ALJ Improvement Board? You may e-mail me at charles[@]charleshallfirm.com.

ID Requirements For Attorneys and Rep Payees

Social Security has published a new directive in its Program Operations Manual Series (POMS) to protect the privacy of Social Security claimants. The directive requires certain identity proof from persons acting on behalf of a claimant, primarily attorneys and representative payees, before information may be given out over the telephone. As a practical matter this requires the attorney or representative payee to know the date of birth, place of birth and mother's maiden name of a claimant.

President Wants To Revisit Social Security

The Washington Post reports that President Bush plans to make another attempt at Social Security "reform" after this November's election. He hopes to be able to "drain the politics out of the issue."

Washington Post on SSA Budget Problems

From the Federal Diary Column by Stephen Barr in today's Washington Post:

The Social Security Administration would be forced to send employees home without pay and shut offices 10 days next year if Congress does not increase its funding in fiscal 2007, the agency has told Congress.

"Fewer resources mean fewer people to serve the public in all areas of SSA's operations," Jo Anne B. Barnhart , the Social Security commissioner, said in a letter to the Senate Appropriations Committee. "Because these budget reductions will affect all employees, they will result in major service disruptions across all workloads."

If the agency resorts to furloughs, the Social Security network of 1,300 field offices would close, probably a day at a time over a five- to six-month period. On those days, the public would not be able to apply for Social Security numbers, replace Social Security cards, file for retirement or disability benefits or obtain decisions on pending disability claims and appeals. ...

"For an agency like ours, it is kind of a shock," said Richard Warsinskey , president of the National Council of Social Security Management Associations.

Warsinskey said he understands that companies lay off and furlough employees in bad economic times, "but this is a public service issue." He said, "We don't want to take a well-run agency and make it mediocre because we don't get enough money."

Mark Lassiter , the Social Security press officer, said no decisions on furloughs have been made. The House and Senate have not finished work on the agency's budget and Barnhart "remains hopeful that the president's budget request will be approved by Congress," he said.

The Senate bill would provide about $9 billion for the agency -- about $400 million less than the president's request and about $54 million less than what the agency received for this year's budget. The House proposal would leave Social Security about $200 million short of what the White House is seeking.

The agency's budget may not be resolved until after the November elections, congressional aides said. A spokeswoman for the Senate Appropriations Committee said House and Senate negotiators would review the agency's funding and staffing levels later this year. Many agencies are likely to face budget squeezes next year, in part because Congress faces tough decisions on financing the Iraq war and homeland security.

Social Security, headquartered in Baltimore, has about 65,000 employees, and officials estimate that more than 40 percent of its workforce will retire by 2014. It appears that not all departing employees will be replaced because of budget pressures. Only one employee is being hired for every three that depart, according to 2006 and 2007 budget plans.

Darryl Perkinson , president of the Federal Managers Association, said reduced appropriations for Social Security will probably worsen the backlog of cases in the agency's Office of Disability and Adjudication Review. The association estimates the backlog has grown to 730,000 cases with an average processing time of 481 days. The group is urging Congress to pass the president's budget request and support adequate staffing levels in the disability review office. ...

In her letter, Barnhart indicated that the Senate's proposal to provide $400 million less than in the president's budget would require a hiring freeze, overtime reductions and other overhead cuts in addition to a 10-day furlough of staff. ...